Case study: Developing an inclusive growth agenda in Cleveland

24th Jan 2017

The City of Cleveland is an urban centre of around 400,000 residents located in Cuyahoga County in the state of Ohio. The population of the city has declined considerably since the 1950s (Gibson, 1998), partly due to significant deindustrialisation.

This deindustrialisation led to rising poverty in the 1970s and 1980s (Warf and Holly, 1997), an imbalance in the local housing market, physical dereliction and a reduction of the tax base (Mallach and Brachman, 2010). The economy began to recover in the 1990s (Warf and Holly, 1997), with overall employment growth in the suburbs, but not in the central city (Mallach and Brachman, 2010). During the 2000s Cleveland has experienced growth in a number of highly-skilled sectors, with increasing job opportunities in some STEM and health occupations, as well as growth in the number of highly-skilled workers living in the city (Piipariene and Russell, 2014). However, poverty rates remain comparatively high (American Census, 2016); unemployment rates are around the national average while wages are slightly below (BLS, 2016).

Governance

The US is a federal system with significant devolution of powers and responsibility to the state level. The City of Cleveland has a ‘strong mayor’ model of government, with the mayor serving as the City’s Chief Executive.

While US cities generally have greater powers than UK ones, interactions with State and National Government remain important. For example, the State of Ohio has recently passed legislation which will prevent the City from using local hire preferences in state-funded construction projects; something the Cleveland Mayor opposed (Office of the Mayor, 2016a). The Mayor has also written in favour of state and national minimum wage rises, as opposed to city-level ones (Office of the Mayor, 2016b).

Strategy, Vision and Leadership

An important strategic approach to economic development and harnessing inclusive growth in the city is the ‘Cleveland Greater University Circle Initiative’ (GUCI). The initiative is a partnership between a number of the city’s important anchor institutions, the public sector and philanthropy. The strategy is ‘spearheaded’ by the Cleveland Foundation, a large philanthropic organisation which provides grant funding to projects concerned with economic and community development, education, housing and a range of other areas of activity in the Greater Cleveland area (Austrian et al 2014).

The GUCI strategy has been developed to help utilise the role of local anchor institutions to help improve the conditions and economic opportunities for disadvantaged citizens of the city. In particular, the strategy has an emphasis on supporting disadvantaged neighbourhoods. The strategy articulates ‘two convictions’ on which the strategy is premised:

  • ‘that by working together, anchor institutions can achieve more than any single institution working on its own’;
  • ‘that while physical development is important to urban revitalization, neighbourhoods cannot succeed unless the people living there are valued and empowered’.

(Source: Cleveland Foundation, 2013)

The strategy was developed to help bridge the ‘invisible divide’ between the city’s important economic institutions, and the areas of disadvantage which surrounded them (Cleveland Foundation, 2013; 8), The University Circle is home to 17 major institutions, but in the residential areas around the Circle (the Greater University Circle Neighbourhood) the population is characterised by comparatively low household incomes and high unemployment (Cleveland Foundation, 2013).

The GUCI strategy focuses on four areas: 1) institutional partnership; 2) physical development; 3) economic inclusion (‘programs for the people’); and, 4) community engagement (Cleveland Foundation, 2013). The balance of emphasis of the strategy is towards improving opportunities, including opportunity to access jobs with chances for career advancement, opportunity to become a worker-owner of a business, and opportunity to become a homeowner. The emphasis is also on building strong communities and supporting community relations.

Design, Implementation, Monitoring and Impact

The management of the GUCI is structured to encourage strategic planning and secure and maintain high level buy-in from partner organisations. There is a Greater University Circle Initiative leadership table (group) of senior managers within the partners which is responsible for setting strategic goals and direction. The partner organisations also meet at a delivery level through an Economic Inclusion Management Committee (EIMC). Leadership has clearly been critical to the development of the GUCI. In particular, the Cleveland Foundation has played a pivotal role, as has the Mayor and City Government. Securing and maintaining the buy-in of senior leaders in the anchor institutions has also been fundamental to the initiative.

The GUCI is regularly monitored and assessed for impact. The most recent evaluation report of the GUCI Economic Inclusion programme covers 2014 (Austrian et al, 2015). The evaluation is structured around the four thematic areas of programme activity: Buy Local; Hire Local; Live Local; and Connect (see Table 1.)

Exemplar themes and initiatives

Table 1 sets out many of the programmes and projects which underpin the GUCI Economic Inclusion programme. The activities are a mixture of those seeking to maximise economic multipliers and reduce the leakage of the benefits of economic activity (Buy Local and Hire Local), as well as those associated with place-making and building communities (Live Local and Connect). The central innovation in the initiative is the role of the anchor institutions in not just supporting outcomes, but for their important role in the strategy formation and partnership working. An important element of this role is through the way they orientate their procurement spending and their recruitment practices. The three anchors combined employ 2,365 local residents. Several projects (NewBridge, StepUp and Welcome to Fairfax) have also been developed which aim to support disadvantaged residents through the process of accessing employment opportunities in the anchor institutions. For example, StepUp is a training programme developed with University Hospitals which targets areas of employment opportunity in the heath sector. The use of cooperative structures (through Evergreen Cooperative an umbrella body for a number of co-ops) is also an innovative aspect of the programme. These provide not just employment, but also potential worker ownership to successful programme entrants. In addition, they can also offer a more flexible and supportive workplace for those experiencing some difficulties in the transition into employment. The cooperative structure may also provide an avenue to move beyond grant funding and build sustainability into development models. Finally, the initiative is also multidimensional, focusing on building the local economy and widening access to employment and enterprise opportunities, but also on housing quality and access and on community development.

Table 1: Selected projects and results from GUCI Economic Inclusion programme Year 4 Evaluation Report
Programme/projects Description Results
Theme: BUY LOCAL
Health Tech Corridor The continuing development of an area with specialism in biomedical and healthcare, including leading medical facilities, universities, business incubators and high-tech companies. The transport corridor is served by a ‘bus rapid transit line’ linking neighbourhoods to a centre of economic activity.

Economic development projects announced, including new superfast speed fibre network.

Starting a ‘coding academy’ for women and minority residents interested in technology.

Physical regeneration – large-scale remediation of brownfield land and other renovation work (since 2008).

Anchor procurement and supply-chain initiative The goal of this strand is to ‘identify opportunities for joint purchasing among the three anchor institutions in the Greater University Circle and leverage their purchasing power to increase local economic activity and build community wealth’.

Case Western Reserve University: Spent $76.4 million in procurement in the City of Cleveland/ $128.6 million within the (Cuyahoga) County, representing 17% and 29% of all procurement spend. Amount of spend and share locally have increased since 2011.

The Cleveland Clinic: Spent $189.8 million in procurement in the City of Cleveland/ $368.9 million within the (Cuyahoga) County, representing 11% and 21% of all procurement spend. Spending in the City increased by $17 million between 2013 and 2014 and by $13 million elsewhere in the County.

The University Hospitals: Spent $126.6 million in procurement in the City of Cleveland/ $314.3 million within the (Cuyahoga) County, representing 18% and 44% of all procurement spend. Spending in the City increased by $2.5 million between 2013 and 2014 and by $140 million across the County.

Small Business Development: NextStep Program Aims to use enterprise to support revitalisation of low-income communities. Provides tuition and business support to existing business owners. N/A
Evergreen Cooperatives Launched in 2009, a group of worker-owned businesses developed to provide new job opportunities. Three cooperatives are operating – Evergreen Cooperative Laundry; Evergreen Energy Solutions and Green City Growers.

The Evergreen Cooperative Laundry has 39 employees and achieved its first ‘profitable year of trading’.

Evergreen Energy Solutions has 14 employees, a ‘steady pipeline of work’ and was ‘slightly profitable in 2014’.

Green City Growers has 31 employees although is not yet profitable.

A new housing support offer has been developed to help support cooperative workers into home ownership.

Theme: HIRE LOCAL
Anchor Hires Direct employment in anchor institutions. StepUp to UH – a partnership between University Hospitals and a local non-profit to help disadvantaged local residents access opportunities for employment and career ladders. The programme aims to backfill entry level positions in patient transport, nutrition services, and environmental services. Welcome for Fairfax programmes – began operating in summer 2014 to provide support with application and interview preparation, as well as other supportive services, to help local residents access opportunities at the Cleveland Clinic.

Of total anchor employment in 2014, 3.5% lived in the GUCI area, 12.7% in Cleveland and 62.7% in the County area (equating to 2,365; 8,447; and 41,795 employed respectively).

28 people were hired through StepUp to UH from GUC neighbourhoods.

Employing Clevelanders through Evergreen Utilising the Cooperatives to support work entry in local communities. 84 employees in 2014 (breakdown report above).
NewBridge Cleveland Center for Arts and Technology Provides programmes for youth in arts and technology, and trains unemployed and underemployed adults for careers in healthcare. The two training paths are in pharmacy and phlebotomy. These training paths have been developed with, and co-designed by local anchor hospitals. The programme includes classroom learning and work placements with partner hospitals. Of 127 enrolees in training programmes, 109 graduated and 69 have accepted job offers.
Theme: LIVE LOCAL
Greater Circle Living Program

A housing assistance programme for those working in the anchor institutions and non-profits in the GUCI area. Employing organisations offer incentives to those living in the areas such as forgivable or loans to help access to housing.

A rental assistance programme also operates.

Around $2.6 million of incentives have been awarded since 2008 to 241 employees.
Theme: CONNECT
Neighbourhood connections

A range of activities to build community networks and mutual support.

Place-making activities – including physical neighbourhood regeneration, healthy community activities and community safety.

Neighbourhood grants – for resident-led projects.

1,500 participants in community networks, 750 acts of mutual support.

$175,000 in neighbourhood grants.

Conclusion

Cleveland provides an example of the development of a strategic approach, underpinned by a range of projects, to widening access to opportunities. This strategy has been developed through the GUCI. The GUCI seeks to utilise anchor institutions and associated economic activities and to better link these to social outcomes for the population of deprived neighbourhoods in the surrounding area. While the language of inclusive growth is not used explicitly in strategic documents, there is an obvious approach to linking the success of city (anchor) institutions more closely with their local populations.

The strategy aims are for greater local recruitment and spending (i.e., changing the behaviour of anchor institutions to help more of the benefits of activities remain in the area), while projects also provide help with access to employment, enterprise support and housing and community development offers. The GUCI highlights the importance of local partnership working and securing buy-in at senior level in partnership organisations, something which is crucial in driving systems change. Other elements of innovation include the role of cooperative forms of employment as a route to employment entry and to asset building.

An important difference between the Cleveland experience and the possibilities in UK cities is the important role played by the Cleveland Foundation, a large philanthropic organisation, in driving both the partnership approach and in the provision of funding for projects over a sustained period.

For more information and references, see our report and appendix.